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The Visible Value Blog

Returns Fraud, Serial Returners & the impact to your bottomline

Posted by Karen Wallis

October 28, 2016 at 7:00 AM

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Be honest, have you ever bought multiple sizes of clothes or shoes online to see which is the best fit, then returned the others using the free returns process? Worse still have you or your friends ever worn an item once then returned it? There’s no doubt about it, many retailers are struggling with the challenges posed by an increased number of customers returning items.

In 2015, the National Retail Federation estimated that holiday returns fraud would cost American retailers $2.2 billion. Now, before we all dismiss this as a US challenge, be warned that global trends are spreading faster than ever! 9 out of 10 retailers are also experiencing the return of stolen merchandise, it’s no wonder there are concerns! These are made even worse by the rise of a new consumer behaviour, ‘Wardrobing’. For the un-initiated Wardrobing is the practice of returning used, but non-defective merchandise. For example, someone might buy a jacket for an important job interview, and then return it the next day to the retailer. As you can imagine, these changes are having a knock on effect on how retailers manage the stock coming back into the business. Returns fraud, serial returners and Wardrobing all pose serious threats to a retailer’s profitability and their ability to track sales. Yet interestingly, evidence suggests simplifying the returns process actually has a positive impact on sales, and when I think about it, it kind of makes sense. 

We’ve all been there, standing in the store, eying up a potential purchase, evaluating everything from the price, through to the hassle of getting it home. In reality, all of our purchases come down to this battle of benefit vs cost, in order to avoid that nagging ‘buyers regret’. It makes sense then, that retailers would want to limit the costs wherever possible and this is where an improved returns process really kicks in. As the risk associated with the purchase is reduced, we are further encouraged to buy that dress with potential, or those overly expensive, yet “must have” shoes, safe in the knowledge we can return them hassle free if they don’t quite work for us when they arrive home. And with that in mind, we’re more likely to shop their again – after all, that’s what our retailers want!

In 2016, returning a product has become easier for the consumer, it’s a statutory right after all - but many retailers are still lagging behind when it comes to improving the necessary process of returning an item to the stock inventory quickly and accurately. This small improvement has the potential to unlock enhanced stock management and ultimately drive profitability. Our current solution ensures the smooth delivery of click and collect can also be adapted to ensure returns are managed effectively.

Advancements in barcode, scanning and data capture technology now allow a new level of efficiency in supply chain management and give retailers the opportunity to streamline their returns process. With total visibility of products throughout the supply chain, retailers can use real-time data to manage inventory and ensure returned stock transitions back to the shop floor as quickly as possible. 

Click here to find out more with our ‘Flawless Fulfilment in the Retail Supply Chain’ survey.

Topics: Retail, Serial returners, Wardrobing, Returns fraud, Retail fraud